India-specific insurance guide. Insurance ≠ investment. Keep them separate — buy term life, not ULIP or endowment.
Type
Minimum Cover
How to Calculate
Notes
Term Life Insurance
10–15× annual income
Cover = 15 × annual CTC (include future income growth)
Pure term only. Buy ASAP — premium increases with age
Health Insurance (Family Floater)
₹10–15L for family of 3–4
In metro cities: ₹15–25L. Hospital costs double every 5 years
Choose 20+ years policy with guaranteed renewal
Personal Health (individual)
₹5–10L minimum
Add super top-up ₹20L+ for catastrophic events
Super top-up = cheapest way to get high cover
Vehicle (third-party)
Mandatory by law
Third-party = legal minimum. Comprehensive = your car + TP
New car: comprehensive for 3 yrs. Old car: TP only is fine
Vehicle (own damage)
IDV of car
IDV = Insured Declared Value (depreciated market value of car)
Not mandatory but wise for new/expensive vehicles
Critical Illness
₹25–50L (add-on)
Sum assured paid lump sum on diagnosis
Cover: cancer, heart attack, stroke at minimum
★PRIORITY ORDER: 1. Term life (only if dependents). 2. Health insurance. 3. Vehicle. 4. Critical illness. 5. Home. Never buy insurance for investment returns.
HEALTH CLAIM — Cashless: Show health card + ID at network hospital. Pre-auth form submitted by hospital
HEALTH CLAIM — Reimbursement: Keep ALL original bills, reports, discharge summary, prescription
HEALTH CLAIM: File within 30 days of discharge. Delay = rejection risk
VEHICLE CLAIM: Inform insurer within 24h of accident. Do not repair before surveyor visit
VEHICLE CLAIM: FIR mandatory for theft and third-party injury accidents
TERM CLAIM (by nominee): Death certificate + original policy + nominee ID/bank details + claimant statement
REJECTION APPEAL: Write to Insurance Ombudsman (irdai.gov.in) if claim wrongly rejected. Free, effective
★Take photos at the scene (accident/damage) immediately. Time-stamped photos are key evidence for vehicle claims.
Trap
What Happens
How to Avoid
Missing renewal date
Policy lapses; no cover, no claim
Set Google Calendar reminder 30 days before expiry
Reducing cover on renewal
Under-insured; claim shortfall
Increase cover ≥ 5% every 2 years (inflation)
Switching insurer mid-claim
New insurer exclusions apply; waiting periods restart
Switch only after settling pending claims
Not disclosing medical history
Claim rejected citing concealment
Always disclose all conditions honestly at application
ULIP as insurance
High charges eat returns; low cover amount
Keep insurance and investment strictly separate
Group health lapsing on job change
Coverage gap between jobs
Port to individual plan before leaving job
Where are policies stored?
Soft copy in DigiLocker + email. Hard copy in a known location at home
Nominee updated?
Check nominee on every policy annually. Marriage/child = update immediately
Premium auto-debit set?
Set mandate on all policies to prevent lapse by forgetting
Annual review
Check sum insured still adequate (income grew? family added? property bought?)